State to buy Budapest Bank

Budapest (MTI) – The Hungarian state will buy Budapest Bank, Hungary’s eighth-biggest lender, from current owner GE, the government has announced.

The government signed a preliminary contract to buy the bank on Thursday.

The transaction is expected to close at the end of July next year, Economy Minister Mihaly Varga said, adding that the goal was to boost lending activity.

The government does not intend to hold on the bank in the long term and will sell it at a later point, he said.

In 2010, the government set out to make sure 50 percent of the country’s banking sector is in Hungarian ownership, he noted. This is now being fulfilled with the purchase of Budapest Bank and MKB and will boost competition and improve services. he said, adding that it was too early to say whether Budapest Bank would be merged with MKB.

In September, the state closed the acquisition of MKB Bank from German owner BayernLB.